Premier Roger Cook announces $150m rescue package for lithium miners to ride out price collapse

Premier Roger Cook has announced a $150 million rescue package for WA lithium miners to ride out the price collapse — but companies will have to prove they can pay back assistance. “We’re not bailing mining companies out, we’re providing them with short-term (assistance) to get through a period of being challenged because of the global markets,” Mr Cook said. The struggling industry was given the heads-up that relief would be forthcoming last month after Mineral Resources announced it would mothball its Bald Hill operations in the Goldfields, not long after Rio Tinto’s Mt Cattlin operation — also located in the Goldfields — was shuttered. Lithium miners in a project ramp-up phase will be given relief for electricity and water costs, port fees, and mining tenement fees, which will be waived for up to 24 months to the value of $9.4m. This will benefit Liontown Resources. Struggling miners will also be offered access to a $50 million interest-free loan facility to sustain production. But only for two years or until the spodumene price recovers to $US1100 a tonne. S&P Global data shows the price of lithium-rich spodumene concentrate has fallen from $US8000 a tonne to currently less than $US900 a tonne within the past two years. Downstream lithium processors, which comprises of IGO, Albemarle and China’s Tianqi, will have government fees temporarily waived for up to 2 years, equating to a total value of $90m. “Our lithium industry is crucial to my Government’s plan to diversify the economy, to carbonise the economy,” Mr Cook said. “Our lithium miners are internationally competitive. They’re efficient and they’re agile ... despite the industry’s strength, it is struggling at the moment as a result of global market conditions.” Mineral Resources’ Bald Hill operation was the latest operation mothballed two weeks ago because of price pressure on the key battery ingredient. About 300 jobs have been impacted. Mr Cook said the company will have to pass due diligence to access any Government loans, in the wake of Chris Ellison’s recent tax evasion confession. “Obviously we need to be convinced that these companies are operating in a manner which gives us the confidence to enter into a financial assistance agreement with them,” he said. “We will make sure we do our due diligence in relation to any financial assistance payment for any company. Can I just say 11,000 jobs depend on this... this is an important opportunity to back Western Australians.” The support package was quickly welcomed by industry groups, after months of lobbying for assistance. “This program will ensure lithium producers across the sector have the best fighting chance to counter the turbulent global headwinds,” Association of Mining and Exploration Companies CEO Warren Pearce said. “This support is time bound and targeted. Placing an upper price boundary by the Government will mean that this support goes to the companies that need it most.” The Chamber of Minerals and Energy has warned lithium prices are likely to remain lower for longer, but said critical mineral is still a strong long-term prospect. “Today’s announcement is welcome recognition of the commercial reality facing key players,” CEO Rebecca Tomkinson said. “It’s important for governments to act when necessary to support the sector through periods of temporary market weakness and keep skin in the game for when the market recovers.” The Albanese Government has used the announcement to add to pressure on Opposition Leader Peter Dutton to support production tax incentives, currently before Federal Parliament. “It is vital we continue to support this industry so that we step up to our global responsibility to secure supply chains for critical minerals and rare earths globally,” Resources Minister Madeleine King said. “Mr Dutton should explain to resource workers around the country why he is refusing to support them.” Liontown Resources recently scaled back expansion plans at its Kathleen Valley mine north-east of Perth. Pilbara Minerals halted work on its Pilgangoora expansion, about 120km from Port Hedland, in October. “We’d love to see that (mid-stream demonstration plant) come back online ... however, at this point in the cycle, the name of the game is preserving cash, reducing costs,” chief executive Dale Henderson told shareholders at the company’s annual general meeting at UWA this week. “So for that reason, we thought, let’s pause that.” WA Mines Minister David Michael denied the assistance package was too late to prevent recent job losses and was hopeful two years would be enough time for the price to recover. “It’s a responsible decision for now to help the lithium industry continue,” he said. “We’ve had a discussion with lithium producers for many months as a Government and we know that these measures should have some incredibly practical support for them to get through the next couple of years.”